What are 'upcoding' and ‘bundling’ and how can they affect the price you pay for health care? In this Blue Promise, a panel of experts discusses two leading drivers for the rising cost of health care. This discussion includes Dr. Paul Hain, BCBSTX North Texas Market President, Melissa Holladay, Executive Director of Texas Market Performance, and co-host Ross Blackstone, Director of Strategic Influence. You can listen to the complete discussion in podcast form on Apple Podcasts and SoundCloud.

Blue Promise is an online video blog that aims to address complicated health issues with candid conversations from subject matter experts. New editions are published regularly and are hosted by Dr. Dan McCoy, President of Blue Cross and Blue Shield of Texas.

We'll explain what it is and how it affects healthcare costs coming up

Thanks for joining us for this edition of Blue Promise

I'm Dr. Dan McCoy I'm the President of Blue Cross and Blue Shield of Texas

I'm here with my cohost Ross Blackstone

ROSS: Thank you Dr. McCoy

So we have two guests here with us today Melissa Holliday is

Executive Director of Texas network performance and Dr. Paul Hain

is our North Texas Market President for us.

PAUL: Hi Ross

ROSS: Hello Paul welcome back

PAUL: Thank you

ROSS: All right so Dr. McCoy you used the word up coding

It's going to be the topic of conversation here with us today

But before we even define what that is Dr. Hain can you help us understand

why we should even care

How might this conversation impact our members in the state of Texas

PAUL: I mean really it's important for specific reasons because upcoding

leads to unreasonably high bills that weren't justified right

So when you have those kinds of unreasonably high bills

two things happen

One whatever share you're on the hook for goes up

So our members need to care because if they're going to have to pay more

into it raises everybody's cost of care

So everyone's premiums end up going up the next year

So you pay more now you pay more later

ROSS: OK so when we talk about why is health care so expensive

This is one of those things. This is why people be

PAUL: One of those things you got to watch

ROSS: In fact I understand that up coding actually ranks with billing for

unnecessary services that weren't even performed or weren't medically

necessary

Inaccurate bills in inappropriate use of emergency rooms and excessive

unconscionable charges for routine service and the proliferation of out of

network freestanding emergency rooms

This ranks right up there with all of those cost drivers

PAUL: It does you know that's a really good list

ROSS: I mean it's comprehensive So Melissa

DAN: Well wait a minute

I want to ask a question OK.

What is up coding

PAUL: What is up coding.

DAN: Yes what is it

PAUL: Up coding is when you and I’m gonna let Melissa take that home

because you know more about it than I knew

But essentially the doc it's when you perform a service and then you send

in a bill for a much more severe service that gets you paid more

DAN: OK now wait a minute I’m gonna say something

This is not a new problem

PAUL: No it is not

DAN: it has been around a long time

PAUL: Yup

DAN: The doctors have always had this sort of threat of up coding.

What's different today

PAUL: What's different today is they're getting a boost from a computer

So there are lots of you know the more people try to massage the system the more rules come out the more you have to keep track of. Well now there are computer programs out there that help suggest ways to bill higher even though it isn't justified.

DAN: So walk me through an example of that

PAUL: All right

So say you come into the emergency room and what you have is some facial pain and a runny nose and what you're going to leave with is a diagnosis of sinusitis. This is not a terribly complex thing for an E.R. doctor to figure out. Right.

So that should be something like a level 2 visit because it didn't require a lot of medical decision making and there wasn't a lot of risk involved

DAN: So when you’re saying levels I mean I think medical visits are kind of 1 thru 5

PAUL: 1 thru 5

DAN: 1 being the cheapest

PAUL: Right so this is a lower level visit right.

But if you start checking all the boxes and the computer rules like I

examined every part of the person's body and I took a really extensive

history and so you can do all these checkboxes it says Oh now it's a

really severe visit but you're conveniently forgetting that you also

have to balance in the risk and the medical decision making to make it a

level five meaning the highest level fives are really for folks who like

you're pounding on their chest admitting to the ICU that sort of thing.

But what we're finding is we're getting billed for a level five for people with sinusitis

DAN: Maybe the boxes you're referring to checking off or things like

family history genetic history social history things that are necessary but not sufficient to call it a level five . examining other areas of the body even though it's sinusitis

PAUL: Right to make sure your toenails look good.

DAN: Gotcha

ROSS: So Melissa help us understand how what what actual code means whenever providers submit claims to to get paid what is a code and how does that how how can something be coded.

MELISSA: So what Dr. Hain was talking about was once the services is

provided a claims code and that claim contains one of these codes

a 9 9 2 8 1 to a 9 9 2 8 5 and

ROSS: These are.. these are C.P. T. codes

Everything that You would do at a doctor he would assign code to that.

MELISSA: That's correct

These are national standard codes. This is what every hospital uses every

provider uses.

It's a standard within the industry and so a level one is the least expensive.

Level five is the most expensive and this is how our pricing is done with the

insurance companies and so naturally if it's least expensive it had the least

severity and we're going to pay less for that

If it is a level 5 it is more severe

The assumption is more resource was used during that time and so we’re

going to pay more for that

And so if they have done measures in order to up code in order to pad the

bill so to speak then they could put it as a Level 5 even though they didn't

use those resources that were paid for.

DAN: So let me ask you a question Paul

PAUL: Yep

DAN: You’re in a restaurant right When you're getting things off the

menu You see at the end of the day have some expectation with the bills

going to be mean to patients even know they walk out the E.R. what the

code is that put on this super bill

PAUL: No, you know it's just amazing because the argument used in many

circumstances and very much so in the E.R. is how could we possibly tell our

patient what it's going to cost

We don't know what they have yet

And even more so they say well you know it's an emergency so we couldn't

possibly explain the price to them

Of course any good E.R. doc knows within three minutes of seeing a

patient where there is currently an emergency or not

Right so that they don't want to disclose their prices especially at these

freestanding out of network areas ERs we talk about so much is really just a

game to make sure that the patient has no idea what the bill is going to be

Right It wouldn't be hard for me to tell you hey every time you step through

our door it's a 2,000 dollar facility fee plus the bill that Melissa was just talking about

That wouldn't be hard for you to understand if you showed up with a sore throat.

ROSS: So you used the example earlier of sinusitis so that would be

somebody going to an emergency room which should have

been coded as a level one emergency because it's not really a super bill

DAN: you don't know that

And I think that's what makes that hard Right

Well you don't really know that

I mean a patient with a simple diagnosis like sinusitis could be a

simple code but there could be mitigating factors about it

Right. Which could adjust the code up and down somewhat although it

might be hard to turn a routine simple illness into something that's a Level 5

which is maybe auto trauma.

PAUL: This is why it is difficult to corral this right. We run algorithms with

things but in the end to really know if it should have been a 5 or 2 you have

to read the record and if the record is came in with the worst headache of

your life and your eye wasn't working very well and you got a CAT scan and

they called a neurosurgeon and it turned out that you actually just had

sinusitis it was pressing on an optic nerve and you just needed to take

some antibiotics and go home

That's a pretty severe visit even though you leave with a diagnosis sinusitis

You can compare that to someone who's had a cold for 10 days and some green snot

They walk in and say hey I think I have sinusitis and the doc says Yeah you do

Here's your amoxicillin

that's not a level 5 Right

But the diagnosis on both is the same So it takes a lot of resources to try to

track this sort of stuff down

DAN: Melissa are we seeing a problem with level five visits

we use that term a lot

MELISSA: There's been a significant increase We've seen ever since 2009

There’s been a 98 percent increase in the use of Level 5

DAN: So I assume that with a 98 percent increase in level fives

there's been a commensurate decrease in other codes

MELISSA: No there's been increasing level 4 an level 3

We basically see almost no level 1 or Level 2

PAUL: So the twos and the ones are falling away and they're just filling 3 thru 5 all the time

MELISSA: Right

We see just a tiny portion of level 1 and level 2

ROSS: I actually have a couple of specific numbers that I got from

Melissa and her team

The level five's increase by 38 percent and the level 4 is increased by

16 percent since 2009.

PAUL: Wow. And then let me tell you what our population didn't suddenly

get a whole lot more severe going into it Right So we're seeing way more

spending with the same number of visits ish so we have the same

population

There's really no other reason for this happening.

DAN: The same number of hospital admissions right.

PAUL: Yes in fact we have fewer so on a population basis

hospitalizations over the x number of years have fallen around 10 percent.

So one could argue that folks are even less severe but that they are getting billed for more.

DAN: OK so who's responsible for this happening because we honestly I was

at a meeting recently and I had an emergency room physician tell me

woo woo woo

When I asked a question about it we use a billing company right

And so the billing company we just hand over records to the billing

company and they submit a bill to you

I don't even know what they bill Right So is it really not the doctor's

is it really the billing company that's doing this or is that now

is that fair practice I don't really know what's going on

PAUL: I hate it when people say that because it's kind of like saying when a

cop pulls you over for you doing 55 and you said look the cruise control is

responsible I was just in the car in the drivers seat being responsible

So all physicians know that they are responsible at the end of the day for

the bills they send out Right

So if you turn it over to a billing company and you just say well the

billing company did whatever it wants and the billing company is committing

fraud you're committing fraud because you hired that billing

company and you were failing to act in your duty to make sure that they are

billing for you in an appropriate manner and in fact I am very

suspicious of anyone who says that their bills are just going out the door

and they never see them in every E.R. I've ever worked in

We either clicked our own bill or we saw the suggested level of care and

we agreed or disagreed.

DAN: So Melissa this is pretty hard for consumers to do anything about right

because if you think about it if they decide to contest a level that's a lot of

work for a consumer to do

Right they're going to have to get the records again to get somebody look it over

They're not going to be familiar with C.P.T.

They're not going to know the difference between a one and a four

And even so if they pull the record according to Paul some algorithm in

the computer said these boxes are checked and therefore the chart

justifies the code

MELISSA: Right

DAN: So what do consumers do. I mean what is the fix here.

MELISSA: Well our team actually will do chart review and so we do

prepayment review of these charts and it's just like what Dr. Hain was talking

about you could have two level five claims both for sinusitis and when you

look at those chart you can actually distinguish between the one that had

a pressure on the nerve and it was justified and needed the CAT scan and needed the level five

DAN: So in other words you can't just you can't just accelerate the code just

by checking boxes there ought to be medical necessity

MELISSA: That's right

PAUL: I think actually what you say you shouldn't. You're not. It's not permissible but people do it all the time

MELISSA: Right

DAN: So that protects the consumer so if your team takes that record and says you know what this really isn't a five it's a three. That helps the consumer right.

MELISSA: That's correct

There is an end result in how much the consumer's going to pay because

it's not going to adjudicate as a Level 5 claim it's going to adjudicate

say three maybe. So we can push the claim back to the provider and explain

the circumstance that it's not justified is a level 5. It's actually more of a level

three and they can resubmit the claim.

DAN: So the years we've seen an acceleration in emergency charges.

And in fact we've had blogs and podcasts where we've talked about

this sort of growth in emergency charges

This is actually not a growth in the absolute unit charge

It's actually a growth in the aggressiveness related to just billing

So we're just billing a higher level of service if you will

Does that contribute to the total cost of care increase in emergency services.

MELISSA: Oh absolutely If you know five years ago you had gone in that

same instance had been a level 3 It may have only been billed at 2000 dollars

DAN: so it could be 20 percent cheaper more than that is…

MELISSA: incorrect and that would affect your deductibles your coinsurance all of that.

PAUL:

Right. I mean let say you're in your coinsurance period

So you've met your deductible you know 20 percent of the bill when you

go in if the bill is 4000 dollars because they up coded you owe eight hundred bucks

But if we turn around and say really that bill should have been 1000 based

on correct coding measures well then you only owe 200 bucks

So that's a 600 dollar savings for our member Right so this is really actually

important because it affects people's pocketbooks

DAN: So the other thing we're seeing is that emergency physicians are in…

emergency services in general are increasingly out of network so what

effect does that have when you have this up coding issue.

PAUL: Well it amplifies it Right because when you're out of network

you get billed even more outrageous charges because there was nothing negotiated

So basically you get billed some insane amounts of money and each level is its

own level of insanity even if you're at a level 5 or level is even more insane.

DAN: So maybe it's 20 percent of a much higher unit cost to begin with.

PAUL: Exactly. And then if you're on the PPO and you go to an out

of network place and you know there's is also a surprise balance bill that

comes out you and that balance bill is even higher so it just compounds over

and over and over and that those are the stories you see in the newspaper

of people you know getting the shock bill from the E.R. that was out of

network for twenty thousand dollars or something

ROSS: out of network rates can be as much as 80 percent more.

Can we get a little understanding Melissa from you around the concept

of bundling and how that relates to coding because I think a lot of people

when they get their explanation of benefits and they look at it you know

the services that they were billed for there might be some confusion around

how to actually evaluate that

Can you explain what bundling is

MELISSA: Some people would relate it to coding. It's really not. Although

similar so you can unbundle certain services say like a CAT scan or you use

a dye for the imaging and it creates a contrast and that contrast dye is used

in order to see what is inside of your body that gives the doctor the image

that they need in order to diagnose you

Well if you bill for the CAT scan without the dye and then you bill for

the dye the provider can get paid more

And that's unbundling so instead

PAUL: Right because normally because when we pay for a CAT scan the dye is included.

MELISSA: That's correct. And so we actually will re bundle that service.

And again that's another way that we're protecting that member on the cost.

PAUL: And this unbundling stuff it's amazing what hospitals do.

Right So for instance if you stay in a hospital overnight there are certain

expectations that when we pay a room charge So there's a room charged by

the facility facilities so you know 1,000 dollars… 950 or whatever and then

we'll get a bill for the room plus oxygen right Plus you know changing

the sheets Plus the food plus everything is in the room like it should

be included in a room charge so you see these mass of unbundling schemes

that we have to go back and read bundle because we've already paid for

it once you don't pay for the room separate from the shampoo in the bathroom.

DAN: And that's what you pay difference of the hotel

I think what's really fascinating about this discussion is the fact that no

patient sees the bill when they're discharged from their room right or

when you leave the E.R. you really don't

Do you see the level and do you have a chance to question it and say…

so you don't really know

You just find this out later when you get your explanation of benefits right.

PAUL: Right

ROSS: So this is what I was getting at with my question about bundling that to...

MELISSA: Wait a minute.

Let's go back to that when you see your explanation of benefits

It doesn't have the level of it.

DAN: No it doesnt.

MELISSA: No. It says you went to the emergency room and it may show that

there was a lab done and there was imaging done you may have had a CAT

scan and this is how much was charged and this is what how the claim

adjudicated in this is what you owe but it doesn't say it was level 5

ROSS: So what do people do about it That's what I'm trying to figure out

know what does the average person do to help control this.

Look we all complain about the rising costs of health care

This is a problem how do we address it

DAN: Sounds like the first thing and I'm going to I'm going to kick this question to Paul this sounds it the first thing is people should avoid the emergency room unless they have an emergency.

PAUL: That would be number one

They should also avoid ever being out of network

DAN: If possible

PAUL: Yes I mean obviously if you're having a true emergency you go to the

nearest emergency room That's obvious I hate that I even have to say that

But 80 percent of the things that go to emergency rooms don't need to be in emergency rooms.

And if you're one of those 80 percent a you should be in an urgent care setting

or at your primary care doctors office

DAN: and I think the 2nd there too as if you were in your primary care office

and particularly if your primary care physician is in some sort of value

based program where they get paid because they take care of you better

not because of how they code right

Is that fair.

PAUL: That's totally fair.

DAN: so then obviously you're somewhat protected more so than from that coding.

PAUL: Right. And just to protect your own wallet right these ridiculous balanced bills that are really part of the business model of the out of network as you know medical bankruptcy is the leading cause of bankruptcy in this country. There are a lot of people who get a 20000 dollar bill from an out of network and just write a check for it. Right. That will bankrupt most people. So the way to protect yourself is to stay in network where the definition of our having a contract is that what we pay for that service settles the bill so you can't get a balanced..

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